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Cheap Buy Now Pay Later Car Insurance: I Need Insurance Auto Insurance Now
Joanna Johnson
Car Insurance Expert
Updated: 01/2022
Joanna is an expert on understanding how the different laws and regulations in the car insurance industry shape the way that policies work.
Understanding Zero Down Payment Car Insurance
In order to make getting a car insurance policy more affordable up-front, many budget wise drivers look for policies that do not require large up-front down payments. Instead, these drivers simply want to purchase the policy and make their monthly payments so that they can avoid driving illegally or having to utilize coworkers, friends and family or public transit for rides to work and to run errands. Unfortunately, car insurance policies with zero down payments can be extremely hard to find, especially if you have a spotty insurance history and a less than stellar driving record. This means that it may take you a considerable amount of time to locate these policies, if you can even find them in your area.
Why No Down Payment Car Insurance May Be Difficult to Find
Low down payment car insurance is typically not too hard to locate depending on where you live and what companies are available in your area. Some companies even offer half off your first payment. However, if you’re looking for a no money down car insurance policy, remember insurance companies incur fees for each new driver they insure. These fees may include running background and credit checks on the driver and pulling the driver’s driving history from the Bureau of Motor Vehicles. It also covers the cost of underwriting the policy and creating the new account, which are known as administrative fees. In order to offset these initial fees, many car insurance companies require a certain percentage of the total premium as a down payment, and these amounts can range from 10 to 30 percent. It’s rare for an auto insurance company to charge more than 30 percent as a down payment, but it can happen. You still may be able to find a 0 down payment insurance policy though depending on a number of factors.
For example: Let’s say that you need a full coverage car insurance policy that includes collision, comprehensive and liability insurance for your new car. Your total 6-month premium is $900 and the insurance company is asking for 10 percent up-front. This means that you would have to pay the insurance company $90 before they will activate your new policy.

Easiest Way to Get First Month Free Car Insurance
The most common way to get a car insurance policy with no down payment is to sign up for direct deposit with the car insurance company. In this scenario, you either call the insurance agent or sign up online. At the end of the conversation or session, you’ll be asked to provide your debit or credit card information. At that time, the first month of insurance will be withdrawn from your account. For every month thereafter, your car insurance payment will be deducted on the same day, providing your due date isn’t a weekend or a holiday. If it is, you’ll notice the debit to your account the next business day. Be sure to ask the agent if you can get the first month free since this they may have a promotion.
How Down Payments Work With Car Insurance
You’re probably familiar with the deposits collected by various utility companies, like electric, gas and phone companies. These deposits are collected in addition to the service charges, meaning even if you provide a $300 down payment to your electric company upon opening your utility account, you’ll still owe your total bill amount when it comes, and it’s up to the discretion of the utility company as to whether you ever get your deposit amount back.
When you hand your car insurance company a deposit, it is deducted from your total 6 or 12-month premium amount.
For example: if your total 6-month premium is $600 and your car insurance company asks for a $100 down payment, the remaining $500 is divided over six months. Meaning you’ll pay around $83 each month for your car insurance. The $100 is not an additional fee on top of your premiums.
The good news is that car insurance companies typically only charge down payments when you first activate your policy. This means that if you switch insurance companies, you’ll probably be charged a down payment, but if you remain with your current insurance agency, you most likely won’t see any additional down payment requirements each time your policy renews.
How to Lower Your Auto Insurance Premium in Order to Lower Your Down Payment
The most important thing you can do to keep your car insurance rates low and your down payment low is to shop around. Different car insurance companies use different metrics for calculating accident-risk and underwriting a new policy. This can result in dramatically different insurance rates, even if the same information is entered. A few items that car insurance companies use to determine your accident-risk include whether or not you are married, your gender, where you park your car at night, where you live and the crime and car theft rates in your area, your driving history, the make, model and age of the car you drive and your credit. However, knowing the metrics doesn’t mean you can lie on your application. If an insurance company catches you falsifying information in order to get lower rates, they will cancel your policy. Instead, you should work on being a safe driver, raising your credit score and potentially moving if you live in a high crime area, which is not only good for your car insurance, it’s also good for the safety of your family.

Be a Safe Driver
Even if you’ve had a bad driving history in the past, you can change that in the future. In order to lower your premiums, focus on obeying all traffic laws and never drive under the influence. Speeding tickets and being caught driving under the influence can very quickly result in car insurance rates that are triple or even quadruple the amounts you are paying now. Car insurance companies typically check your driving history for the last three years. When they do this, they are looking for anything that says you are a potentially unsafe driver. As you improve your driving and avoid traffic violations, your previous incidents will become less relevant when calculating your rates, and as your premiums reduce, your potential down payment amounts will become less expensive.
Take Advantage of Auto Insurance Discounts
Lowering your total premium amounts by taking advantage of discounts can lower your down payment. Many car insurance companies offer multi-car and multi-line discounts, which result in a certain percentage deducted from the total premium amount. There are also discounts for being a good student, having a car with certain safety features, being over the age of 25 and for taking a defensive driving course.
Only Get the Car Insurance You truly Need
Before you get a car insurance policy, evaluate your car insurance needs. While every driver is required by law to carry liability car insurance, not every driver needs comprehensive and collision insurance.
Liability Insurance – Pays the other drivers expenses related to the car accident (required by law, doesn’t have a deductible)
Comprehensive Insurance – pays for non-driving related damage to your vehicle (may or may not have a deductible)
Collision Insurance – Pays for damage to your vehicle regardless of fault (usually has a deductible)
If you drive an older car or a car that has a low market value, liability insurance may be appropriate for you and your family. If you are still making payments on your car or have a car lease, you’ll probably need all three types of coverage due to the requirements of your financial institution or dealership where you are leasing your car.

Keep Your Deductibles High But Affordable
Collision insurance most typically contains a deductible amount. Though, some insurance companies offer deductibles as low as zero. Comprehensive insurance typically doesn’t include a deductible, but some car insurance companies may have comprehensive insurance policies that contain deductibles. Liability insurance is least likely to have a deductible. However, if you have deductibles in your policy, you can raise them in order to lower your premiums amounts and potentially your down payment amount. The trick here is to always choose deductible amounts that is within your budget. For most drivers, that’s going to be in the $100 to $500 range. This amount is the amount you pay for the repair or replacement of your car. Your auto insurance company pays the remainder of the claim. Since raising your deductible means that you are taking on more financial responsibility, your premiums are likely to be lower.

Objectively Evaluate Each Potential Claim
It’s true that the more car insurance claims you file, the higher your insurance premiums will rise. In fact, car insurance companies are notorious for raising rates even after your first car accident. In order to prevent this scenario, it’s important to objectively evaluate each potential claim before you file.
When you are proactive about finding the right insurance company and the right auto insurance policy while taking advantage of discounts and working to improve your driving record, you can find car insurance that is both affordable on a monthly basis and affordable upfront with lower down payments.
FAQ
General Car Insurance Questions
This section will answer your general questions about car insurance and down payments on car insurance.
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Do you have to pay 6 months upfront car insurance?
Where can I get auto insurance with no money down?
Can I buy one day car insurance?
What happens if I stop paying my car insurance?
Can you cancel car insurance at any time?
Do I need to cancel my old car insurance?
What is the down payment on a car insurance quote?
Where to get car insurance online with no down payment?
Can I cancel my car insurance if I paid in full?
Why do car insurance companies charge a down payment?
Car Insurance Pricing
We’ll answer the most popular questions about car insurance pricing in this section.
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How much is insurance for a car a month?
Is it cheaper to pay car insurance monthly?
Is it better to pay car insurance monthly or every 6 months?
Why is car insurance so expensive?
How much is teenage car insurance per month?
What is the average down payment for car insurance?
Do you need a down payment for car insurance?
How much down payment for car insurance? Can if be under $100?
Do insurance payments go down after a year of driving?
Do you pay insurance down payment plus monthly?
Which car insurance is cheapest?
Which car insurance company has the lowest down payment?
Which car insurances waive down payment if you get direct?
How much down payment on commercial auto insurance?
Should I pay car insurance in full?
Does paying a down payment make car insurance cheaper?
How does the size of my down payment affect the cost of my car insurance?
How does my car insurance deductible affect my down payment?
Car Insurance Payments
This section will answer your questions about paying for car insurance.
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What is an insurance down payment?
Can you get car insurance without a down payment?
Can you pay a bigger deposit on car insurance?
Do you have to pay right away for car insurance?
How often do you pay car insurance?
Can you pay a lump sum off your car insurance?
Can you pay car insurance in installments?
Can I pay car insurance yearly?
Can you get car insurance with no money down?
Do I have to pay car insurance upfront?
Is there a down payment for car insurance?
Do you have to pay a deposit on car insurance?
Where can I get car insurance with no down payment near me?
Is car insurance first month’s bill the same as a down payment?
Specific Companies and Car Insurance Down Payments
We’ll cover the questions you have about specific companies and car insurance down payments in this section.
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Does Allstate require a down payment?
Do you need a buy now pay later car insurance policy?
Does State Farm auto insurance charge a down payment?
Do you need a down payment with Progressive car insurance?
Other Car Insurance Questions
This section covers questions about car insurance down payments that don’t fit into our other categories.
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Do you get your deposit back if you cancel car insurance?
Does paying car insurance monthly affect credit score?
Can you get car insurance on the same day?
Does car insurance deposit cover first month?
Does online car insurance require a down payment?
Are you looking for car insurance?